Emirates, Dar Al Arkan plan sukuk; Ivory Coast eyes euro deal; Russia to price $4 billion

By Rebecca Melvin

New York, March 7 – Emerging markets were busy in the early session on Wednesday even as selling hit the broader markets amid volatility tied to growing concerns about the possibility of implementation of U.S. trade tariffs and other countries countering with retaliatory measures.

Among notable new deals in the emerging markets, the United Arab Emirates’ Emirates Airlines announced plans for the market’s first corporate Islamic bond for the year. Emirates mandated banks and plans to hold a roadshow for a 10-year dollar sukuk deal starting on Thursday.

The Dubai-based airline was last in the international sukuk market in 2015 and is looking to raise about $1 billion to diversity funding with the new deal.

Dar Al Arkan Real Estate Development Co. was also heard to have mandated banks to manage a sukuk offering, namely Goldman Sachs International and Deutsche Bank along with Dubai Islamic Bank, Alkhair Capital, Emirates NBD, Nomura, Noor Bank and Standard Chartered.

Dar Al Arkan, which has a $450 million sukuk maturing in May, is a Saudi Arabian property development company.

Also in the Middle East, BankMuscat launched on Wednesday $500 million of five-year notes to yield mid-swaps plus 230 basis points. That pricing was tight compared to initial talk for a yield in the area of mid-swaps plus 250 bps.

BankMuscat is a financial services company based in Oman.

In Africa, Ivory Coast also announced banks and a roadshow for a proposed offering of euro-denominated notes with terms of up to 12 years. The meetings are set to begin March 9 in both the United States and Europe.

Also in Africa, statistics emerged on Senegal’s newly priced €1 billion 4¾% 10-year notes and $1 billion 6¾% 30-year notes.

The 4¾% notes had an order book of about €4.5 billion with final accounts allocated more than €250 million, according to a syndicate source. Forty-three percent of the investors are based in the United States, with 28% in the United Kingdom and 19% allocated to other European countries, with Germany at 8% accounting for the largest slice of the pie.

The statistics for the 30-year paper were more focused, with U.S. investors accounting for 49% and U.K. investors accounting for 36%. Fund managers were by far and away the largest investor group for both tranches at 89% for each.

Also pricing off of European desks, China National Chemical Corp. (ChemChina) priced €1.2 billion 1¾% four-year notes at 99.695 to yield 1.826%, or a yield spread of mid-swaps plus 150 bps.

The Beijing-based state-owned chemical company is also pricing four tranches of dollar denominated notes that were pricing out of Asia, according to a syndicate source.

The four dollar-denominated tranches, including three-year, five-year, seven-year and 10-year notes that were being talked to yield Treasuries plus 200 bps area, 220 bps area, 235 bps area and 250 bps area, respectively.

Bank of America Merrill Lynch, Barclays, BNP Paribas, BOC International, China Citic Bank International, Commerzbank, Credit Agricole CIB, Credit Suisse, First Abu Dhabi Bank, HSBC, Industrial Bank Co. Ltd. Hong Kong Branch, Morgan Stanley, MUFG, Natixis, RaboBank, Santander, Societe Generale CIB and UniCredit are joint global coordinators, joint lead managers and joint bookrunners for the Regulation S deals.

The proceeds will be used to refinance existing debt and for general corporate purposes.

Oversea-Chinese Banking Corp. Ltd. priced £250 million floating-rate five-year notes to yield Libor plus 27 bps area. The covered bonds distributed under Regulation S are backed by 100% Singapore-dollar denominated Singaporean residential mortgage loans.

Meanwhile, Russia is offering up to $4 billion of new notes concurrently with a tender offer of existing 2030 bonds, according to a release.

VTB Capital plc is the deal manager for the new notes.

Russia is also tendering for its 7½% bonds due 2030 via an intermediated exchange. The maximum to be paid in the tender will be set equal to the gross proceeds from the new deal.

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